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GuruFocus has detected 6 Warning Signs with Campbell Soup Co \$CPB.
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Campbell Soup Co (NYSE:CPB)
Inventory Turnover
1.51 (As of Jan. 2017)

Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as cost of goods sold divided by average inventory. Campbell Soup Co's cost of goods sold for the three months ended in Jan. 2017 was \$1,346 Mil. Campbell Soup Co's average inventory for the quarter that ended in Jan. 2017 was \$892 Mil. Campbell Soup Co's inventory turnover for the quarter that ended in Jan. 2017 was 1.51.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Campbell Soup Co's days inventory for the three months ended in Jan. 2017 was 60.47.

Inventory can be measured by Days Sales of Inventory (DSI). Campbell Soup Co's days sales of inventory (DSI) for the three months ended in Jan. 2017 was 37.49.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Campbell Soup Co's inventory to revenue ratio for the quarter that ended in Jan. 2017 was 0.41.

Definition

Campbell Soup Co's Inventory Turnover for the fiscal year that ended in Jul. 2016 is calculated as

 Inventory Turnover (A: Jul. 2016 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (A: Jul. 2016 ) / ( (Inventory (A: Jul. 2015 ) + Inventory (A: Jul. 2016 )) / 2 ) = 5181 / ( (995 + 940) / 2 ) = 5181 / 967.5 = 5.36

Campbell Soup Co's Inventory Turnover for the quarter that ended in Jan. 2017 is calculated as

 Inventory Turnover (Q: Jan. 2017 ) = Cost of Goods Sold / Average Inventory = Cost of Goods Sold (Q: Jan. 2017 ) / ( (Inventory (Q: Oct. 2016 ) + Inventory (Q: Jan. 2017 )) / 2 ) = 1346 / ( (964 + 820) / 2 ) = 1346 / 892 = 1.51

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Campbell Soup Co's Days Inventory for the three months ended in Jan. 2017 is calculated as:

 Days Inventory = Average Inventory (Q: Jan. 2017 ) / Cost of Goods Sold (Q: Jan. 2017 ) * Days in Period = 892 / 1346 * 365 / 4 = 60.47

2. Inventory can be measured by Days Sales of Inventory (DSI).

Campbell Soup Co's Days Sales of Inventory for the three months ended in Jan. 2017 is calculated as:

 Days Sales of Inventory (DSI) = Average Inventory (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 ) * Days in Period = 892 / 2171 * 365 / 4 = 37.49

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Campbell Soup Co's Inventory to Revenue for the quarter that ended in Jan. 2017 is calculated as

 Inventory to Revenue = Average Inventory (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 ) = 892 / 2171 = 0.41

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Campbell Soup Co Annual Data

 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 Inventory Turnover 5.83 6.02 5.51 5.85 5.71 5.89 6.27 5.46 5.27 5.36

Campbell Soup Co Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Inventory Turnover 1.38 1.48 1.36 1.21 1.42 1.45 1.44 1.29 1.43 1.51
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